Space-Time Modelling of the Unemployment Rate in Polish Poviats

Abstract

The purpose of the article is to model the unemployment rate in Poland in its spatial and time dimensions. The spatial lag models with the neighbourhood matrix based on the common border of poviats were used in the study. The analysis of the changes over time of the parameters in the space models gave a foundation to apply the space-time model with the parameters linear dependent on time. Such an approach enabled us to work out models with good statistical properties and with a possibility of providing a correct economic interpretation of the parameters. K e y w o r d s: spatial econometrics, spatial model, space-time model.